Yum! Brands Just Released Its Q1 Earnings. Here's What That Means for Taco Bell, Pizza Hut and KFC Franchises.Considering a Yum! Brands franchise? Take a look at the company's first-quarter earnings.
Yum! Brands outperformed expectations for the first-quarter of 2018. According to theZacks Consensus Estimate, the parent company of狗万官方Franchise 500 companiesTaco Bell(No. 8),Pizza Hut(No. 47) andKFC(No. 233) was set to have total revenues of $1.08 billion. Instead, Yum! Brands revenues were $1.37 billion. That number is still down 3 percent from last year's Q1 earnings of $1.42 billion, but it's "consistent with our expectations," said CEO Greg Creed in the earnings conference call Wednesday.
As a result, the company earned 90 cents per share -- again outperforming the 68 cents per share analysts in a Thomson Reuters survey expected.
KFC was the worst-performer of the three franchises, as revenues were down $658 million -- a 10 percent decrease from this time last year. KFC pointed to ashortage of chickenin the U.K. as the cause for this -- some stores were forced to temporarily close when delivery partner DHL could not fulfill deliveries.
"Adjusting for the impact of this, we estimate Yum same-store sales growth would have been 2 percent and KFC's same-store sales growth would have been 3 percent," said David Gibbs, president and chief financial officer at Yum, during the conference call.
However, in part due to positive revenues from Pizza Hut ($251 million, up 8 percent from last year) and Taco Bell ($462 million, up 2 percent from last year), Yum! Brands said net income rose to $433 million.
Related:Just How Much Does It Cost to Own a Fast-Food Franchise?
So, what does this mean for your investment in a Yum! Brands franchise? Well, a few things. Overall same-store sales were up just 1 percent, much less than theexpected 1.9 percent。然而,塔可钟(Taco Bell)设法超越它的经验ectations. Plus, a year ago, many were ready for Yum! Brands to divest Pizza Hut. Now, even if the pizza franchise's same-store sales growth is, as Creed said on the call, "simply not acceptable," at least the Pizza company is showing a positive net revenue. In part, that has to do with Yum! Brands' $130 million investment back into Pizza Hut.
You shouldn't make a six-figure investment decision based on a single earnings report, but it's good to know that Yum! Brands is trying so diligently to improve Pizza Hut's presence and same-store sales. You can learn more about Pizza Hut and other pizza franchiseshere, or check out theFranchise 500for the full list.
